IDB: IN 2014 LATIN AMERICA AND THE CARIBBEAN WILL GROW 3%

Washington, January 6- The year now coming to a close was marked by an external context that did not encourage a strong economic performance in Latin America and the Caribbean. The high degree of volatility that rattled international financial markets and the fall in prices for basic goods took a toll on the region’s GDP growth, which averaged 2.7 percent. In 2014, the growth forecast for the economies of Latin America and the Caribbean as a whole is 3.0 percent.

“A less favorable external environment, along with weak external demand over the mid-term and latent risks in international financial markets, will require the region to accelerate growth without depending on the external conditions that helped us in the past decade,” IDB President Luis Alberto Moreno said in his year-endreport to the Bank’s Board of Executive Directors.

“Therefore, our priority is to increase potential output over the medium term through reforms focusing on bottlenecks that are restricting growth in productivity, internal savings and investment,” Moreno added.

As an example, Moreno cited the need to improve the quality of education, as seen recently in the region’s performance in the PISA, an international educationalevaluationtool. In the 2013 PISA test, Latin American youths did not perform nearly as well as students from other regions of the world.

Moreno added that Latin America and the Caribbean need to invest more in infrastructure, given the gap that exists in that area between the region and the world’s richest and most dynamic countries. Besides modernizing their highways, ports and airports, the countries of Latin America and the Caribbean must improve infrastructure and logistical services in order to lower transaction costs and make their industries more competitive.

The IDB in 2013

According to preliminary data, in 2013 the IDB approved 167 financing packages worth some $14 billion, a figure surpassed only by that of 2009, when the Bank´s financing hit a $15.9 billion in response to the global economic crisis.

As for resources, new operations centered on high-priority sectors such as institutional development (37 percent), infrastructure and the environment (33 percent), social welfare programs (21 percent) and regional integration and overseas trade (9 percent).

Among the loans and guarantees approved by the IDB in 2013, private-sector operations (without a sovereign guarantee) totaled $2.1 billion.

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